The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual çash flows from new equipment is 75.000. Annual cash Outflows are = Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maihtenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 2,0 170 O B) 3,5 O C) 5,0 OD) 4,0 O E) 3,0

The information below relates to the purchase of equipment: investment in the project: $10,000 Net annual cash inflows: 2,400 Working capital required: 5,000 Salvage value of the equipment: 1,000 Life of the project: 8 years At the completion of the project, the working capital will be released for use elsewhere. Compute the net present value of the project, using a discount rate of 10% $606 $8,271 ($1,729) $1,729

B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $360,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required A Compute the annual net cash flow. Required B Required C Annual Results from Investment Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Equipment Selling, general, and administrative expenses. Income Net cash flow Income $ 225,000 $ 120,000 30,000 22,500 52,500 $ 225,000 120,000 30,000 22,500 $ 52,500 Cash Flow Flow

just A

3.  Becktell Industries has an offer to build a special product for the state highway patrol.   The  contract  will  cover  a  period  of 10 years.  The projected cash flows associated with the contract are given below:                       Required:  Complete an analysis to calculate the net present value of the above cash flows.   Company Required Rate of Return 11%                     Cost of new equipment          325,000     Working Capital needed          150,000     Net annual cash receipts            80,000     Salvage Value at end            75,000

MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash inflows from the use of equipment is given below: Year Cash flow $60,000 $40,000 $70,000 $125,000 $35,000 4. Payback period for the proposal is: a. 3 years b. 2 years c. 4 years d. 3.08 years DELL 123 45

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $480,000 cost with an expected four-year life and a $20,000 salvage value. Additional annual information for this new product line follows. Required 1. Determine income and net cash flow for each year of this machine’s life.2. Compute this machine’s payback period, assuming that cash flows occur evenly throughout each year.3. Compute net present value for this machine using a discount rate of 7%.

B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $240,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows.   Sales of new product $ 150,000 Expenses   Materials, labor, and overhead (except depreciation) 80,000 Depreciation—Equipment 20,000 Selling, general, and administrative expenses 15,000 Income $ 35,000  (a) Compute the annual net cash flow.(b) Compute the payback period.(c) Compute the accounting rate of return for this equipment.

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Most Company has an opportunity to invest in one of two new projects. Project Y requires a $320,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $320,000 investment for new machinery with a five-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year.     Project Y Project Z Sales   $ 385,000     $ 308,000   Expenses                 Direct materials     53,900       38,500   Direct labor     77,000       46,200   Overhead including depreciation     138,600       138,600   Selling and administrative expenses     28,000       27,000   Total expenses     297,500       250,300   Pretax income     87,500       57,700   Income taxes (38%)     33,250       21,926   Net income   $ 54,250     $ 35,774     Compute each project’s accounting rate of return.